Balance Sheet Exercises Exercise 1 Indicate the effect of each transaction below on the balance sheet equation. After each transaction is properly recorded, compute new subtotals for the Assets, Liabilities, and Owners' Equity, being sure to maintain the equality of the equation. Use the following format: Example: Issued 4,000 shares of P100 par value common stock for P600,000 cash. Transaction Assets Liabilities Owner's Equity %3D Number + 600,000 Example Subtotal + 600,000 600,000 600,000 a. Received P12,000 for a magazine subscription to be delivered to customers over the next year. b. Paid P7,000 in advance for one year of insurance. c. Purchased forP500,000 cash a building the firm will use for office space. d. Paid P15,000 to an advertising agency for a promotional campaign that will start in one month. e. Bought P115,000 of merchandise inventory on account. f. Paid P65,000 to the supplier for inventory purchase in (e) and gave a note for the remaining P50,000. g. Loaned P30,000 to an officer and accepted a 90-day note as evidence of the loan. h. Bought P42,000 of merchandise for cash. Borrowed P75,000 from the bank. Issued ten shares of P100 par value common stock in settlement of an account payable of P26,000. k. The company agrees to buy four trucks six months from now for P178,000.
Balance Sheet Exercises Exercise 1 Indicate the effect of each transaction below on the balance sheet equation. After each transaction is properly recorded, compute new subtotals for the Assets, Liabilities, and Owners' Equity, being sure to maintain the equality of the equation. Use the following format: Example: Issued 4,000 shares of P100 par value common stock for P600,000 cash. Transaction Assets Liabilities Owner's Equity %3D Number + 600,000 Example Subtotal + 600,000 600,000 600,000 a. Received P12,000 for a magazine subscription to be delivered to customers over the next year. b. Paid P7,000 in advance for one year of insurance. c. Purchased forP500,000 cash a building the firm will use for office space. d. Paid P15,000 to an advertising agency for a promotional campaign that will start in one month. e. Bought P115,000 of merchandise inventory on account. f. Paid P65,000 to the supplier for inventory purchase in (e) and gave a note for the remaining P50,000. g. Loaned P30,000 to an officer and accepted a 90-day note as evidence of the loan. h. Bought P42,000 of merchandise for cash. Borrowed P75,000 from the bank. Issued ten shares of P100 par value common stock in settlement of an account payable of P26,000. k. The company agrees to buy four trucks six months from now for P178,000.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
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Chapter2: The Basics Of Record Keeping And Financial Statement Preparation: Balance Sheet
Section: Chapter Questions
Problem 11P
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Transcribed Image Text:Balance Sheet Exercises
Exercise 1
Indicate the effect of each transaction below on the balance sheet equation. After each
transaction is properly recorded, compute new subtotals for the Assets, Liabilities, and Owners'
Equity, being sure to maintain the equality of the equation. Use the following format:
Example: Issued 4,000 shares of P100 par value common stock for P600,000 cash.
Owner's Equity
Transaction
Number
Assets
Liabilities
+
Example
Subtotal
+ 600,000
600,000
+ 600,000
600,000
a. Received P12,000 for a magazine subscription to be delivered to customers over the next
year.
b. Paid P7,000 in advance for one year of insurance.
c. Purchased forP500,000 cash a building the firm will use for office space.
d. Paid P15,000 to an advertising agency for a promotional campaign that will start in one
month.
e. Bought P115,000 of merchandise inventory on account.
f. Paid P65,000 to the supplier for inventory purchase in (e) and gave a note for the
remaining P50,000.
g. Loaned P30,000 to an officer and accepted a 90-day note
h. Bought P42,000 of merchandise for cash.
i.
evidence of the loan.
Borrowed P75,000 from the bank.
Issued ten shares of P100 par value common stock in settlement of an account payable of
P26,000.
k. The company agrees to buy four trucks six months from now for P178,000.
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